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As an important milestone in its expansion, the company moved its headquarters to the Swiss city of Zug — a municipality that, in addition to low corporate and personal income tax rates, offers high-tech technology and telecoms infrastructure and a service infrastructure of banks, insurers, consultants and IT companies catering for the needs of commodity traders. We recently paid a visit to the group's headquarters in Zug. Founded in Hungary in , today MET Group is active in the natural gas markets of 26 countries and 19 international trading hubs operating through its local subsidiaries.
Today the company is a significant natural gas trader in Central and Eastern Europe and in traded more than 16 billion cubic metres of natural gas, double what is sold annually in Hungary. The group is also active in power, crude oil and oil products and liquefied natural gas LNG trading and wholesale, serving more than 5, clients with a staff of over Profit figures are not readily available as the company, just like its competitors, stops short of publishing them.
What it did disclose, however, is that the group has been profitable ever since its inception, while, as a clue, it also revealed that margins are in the low one digits in retail and wholesale trading, which generates most of the revenue. The latter is the parent company of all MET subsidiaries providing funding to group members. It is also in charge of business development and acquisitions.
This business typically involves one-digit margins and big volumes, the latter evidenced in the case of MET by its 5 th place ranking based on its Commodity trading is becoming a more and more complex task every year partly because of newly opening natural gas import routes into Europe, and a market that has, in essence, become global with the advent of LNG.
Furthermore, clients often use different, substitutable commodities for the same ends, heating up a refinery using oil rather than gas, for instance, but complexity is also growing due to increasingly elaborate expectations by clients, who are looking for structured products and services.
Only a few years ago most clients had fixed rate, long-term agreements, but today it is more common for clients to opt for services under varying terms and conditions in multiple countries at the same time, sometimes under contracts linked to a diverse range of products such as the price of aluminium or refinery margins.
Moreover, price is not the single primary aspect for clients as they also seek to buy amounts aligned with their anticipated needs at an optimal price, which means MET has to be able to shift between fixed and variable prices.
The Hungary-born business has grown to become a Swiss-based group of companies. Municipal governments, of which there are close to 2, across the country, can impose their own local taxes. Furthermore, holding companies such as MET Holding can operate under special rules that grant exemption from corporate taxes at the cantonal level and pay the federal corporate tax rate of 8.
Another incentive is that Switzerland has explicitly low personal income tax rates. Zug, by the way, is also home to other large commodity trading firms such as Klesch, Bashneft and Glencore. This point is backed up by the market share figures of the Swiss commodity trading industry which holds.
Whoever matters in the industry does have a presence in Switzerland, from market players focusing on certain sub-markets Vitol, Trammo, ADM to Glencore, the heavyweight of the industry.
Another case for Switzerland is its predictable and stable regulatory environment, exchange regulations and the availability and quality of financial services. It is also a world leader in high-tech technology and telecommunications infrastructure. MET aims to use its credit facilities for general corporate purposes, but parts of it may also be utilized for acquisitions.